Policy Win: The National Bank of Ukraine Canceled the Limit for Funding Representative Offices of Ukrainian Companies Abroad
The American Chamber of Commerce in Ukraine welcomes the adoption of Resolution of the Board of the National Bank of Ukraine (NBU) #86 dated June 27, 2019 amending the regulation of foreign currency transactions that comes into force on July 2, 2019. The Regulation #86 canceled several administrative restrictions being burdensome for Ukrainian companies, foreign investors and diplomatic missions. The Chamber addressed letters regarding the necessity of introduction of these amendments to the NBU and, thus, welcomes their adoption since they are aimed at reducing the administrative burden on business and deregulation.
In particular, Regulation #86 introduced the following changes:
- the limit for funding representative offices and other separate subdivisions of Ukrainian companies abroad has been canceled. Beforehand, the transfer of funds to foreign affiliates was limited for legal entities up to 2 mln EUR per year
- reinvestment of foreign investors' income from operations with Ukrainian securities is simplified. Non-residents are allowed to transfer funds received from securities registered with a foreign depositary bank from the correspondent account of this institution to their own account in Ukraine
- risk-oriented supervision of banks was improved, in the part of inspections of foreign counterparty banks, to which transfers are made by Ukrainian companies. From now on, banks themselves, on the basis of information from public sources, will determine the degree of risk of foreign counterparty banks for a currency transaction. Previously, they used the list provided by the National Bank on the basis of information from the State Financial Monitoring Service of Ukraine
We would like to thank Yakiv Smolii, Governor of the National Bank of Ukraine and his team for introducing these important for the business community amendments, as well as experts of the Chamber Member Companies, who were actively involved in this advocacy process, for their contribution.